The Enterprise Project Tollgate Process

Transcription

1 McMaster University Xerox Centre for Engineering Entrepreneurship and Innovation xceei.mcmaster.ca The Enterprise Project Tollgate Process June 2014

2 Contents Enterprise Project Tollgate Process... 2 Appendix Tollgate 1: Concept Initiation Tollgate... 4 Appendix Tollgate 2: Business Initiation Tollgate... 6 Appendix Tollgate 3: Business Startup Tollgate... 8 Appendix Academic Requirements and Logistics Associated with the Enterprise Project Tollgate Process Tollgate Evaluation Policy MEEI/MTEI Enterprise Project Tollgate Procedures

3 Enterprise Project Tollgate Process The MEEI and MTEI programs use a phase and gate commercialization process called the Enterprise Project Development Process. The Enterprise Project Development Process is similar to processes used in industry for new product development or new business creation. The idea is to manage the risks and the resources while you are establishing your business. As shown in the figure below, there are four main phases in the new business creation process used by the MEEI and MTEI programs. The essence of this commercialization process is to set deliverables for each phase. Then at the end of each phase, the information collected is evaluated and a decision is made to either: continue to the next phase, get more information from the current phase, or terminate the business venture. The Advisory Committee reviewing the deliverables at each tollgate of the Enterprise Project is evaluating the quality of the analysis, and the level of judgment exercised, to arrive at the deliverables for the previous phase. Advisory Committee decisions are Go/No Go decisions that reflect the Advisory Committee s assessment of whether or not the information describing the business case has been thoroughly researched and whether or not the tools taught has been satisfactorily executed. The Advisory Committee does not assess business viability. This assessment is the responsibility of the candidate(s) who can seek input from the Advisory Committee members independently. As a project moves through the process, assumptions are tested for validity so that the information for each set of deliverables is refined and enhanced. This continuous refinement of the understanding of the enterprise project moves the 2

4 project concept from the status of an untested idea at the beginning of the process to an implementable business at the final gate. In Phase 1 of the process, the entrepreneur is trying to evaluate the opportunity without investing significant time or resources. An understanding of the problem to be solved, the nature of the solution, and the customer groups that can benefit from this solution, are key deliverables. In addition to using secondary market research data, it is expected that the students will talk to industry experts to better understand the market niche or the industry they are targeting. The preliminary work associated with this phase will also focus on the competitive situation in the envisioned market(s), the business model and value proposition. The preliminary technical plan should include analysis of intellectual property issues associated with the solution and sketch out the plan for achieving proof of concept with technology. At the end of the first phase, the student goes through the Concept Initiation Tollgate. The specific deliverables for this tollgate are found in Appendix 1. In Phase 2, the entrepreneurs have to validate the assumptions they made in the Concept Initiation Tollgate and perform both technical and market feasibility analysis. The main objective is to validate that there are customers willing to pay for your product and/or service. From the market development side, it is expected that thorough market research will be carried out to explore different customer groups, determine what is the market size? Who are the main competitors? Etc. From the technical perspective, the students are expected to prove that the core technology works and that there is no further invention required. Moreover, using the voice of customer, a clear understanding of how customer needs will map onto the technical characteristics of the product/service has to be developed. When the market development activities and the technical POC are done, the financial case is developed and the Business Initiation Tollgate is carried out. The specific deliverables for this tollgate are found in Appendix 2. In Phase 3 of the process, the knowledge accumulated in the second phase provides the context for an analysis of potential business models and the selection of a business start up strategy. Remaining project assumptions are tested and the outcomes are used to formulate the strategic go to market approach. The strategic decision process should lead to the development of a fully articulated business plan. The expectation is that the business is either ready to enter the market and raise funds, or the venture is terminated, at the conclusion of the Business Startup Tollgate. The specific deliverables for this tollgate are found in Appendix 3. 3

5 Appendix 1 Tollgate 1: Concept Initiation Tollgate In Concept Initiation Tollgate, a convincing case should be made to the Advisory Committee that there is a business opportunity worth pursuing. The Advisory Committee is evaluating the analysis carried out so far and the exercise of appropriate business judgments in the development of the assumptions, data, and conclusions that constitute the business case thus far. Candidates use the tools learned in Module 1, in addition to talking to industry experts to: Articulate what is the problem they are trying to solve or the market gap that they are trying to fill Explain what the proposed solution is and what your unique selling point is. Explain what the solution will look like, what are the benefits to customers and what are the main features and attributes of the solution? Using secondary market research, identify the different customer groups that can potentially benefit from the proposed solution and how they make their purchase decisions, estimate what is the market size, how can you reach your customer, and what are the most common business models in your targeted industry. Identify the competition for the proposed solution, what companies? What technologies? Present a clear technology development plan. A clear approach should be presented to demonstrating that the core technology can provide the essence of the proposed solution. The planning of the required activities should identify all of the resources needed to carry out the proof of concept activities. Carry out a preliminary analysis of the supply chain for the solution. Who would supply the needed components and what would it take to transform the components into a solution for the customer. Estimate the cost associated with producing the solution for the customer. Carry out a detailed intellectual property analysis. Identify the novelty associated with the idea/technology and how might it be protected. Identify any intellectual property that might prevent the offering of this solution to the customer. Identify the approach to acquiring access to any intellectual property that will be required to bring the solution to the customer. What are the major milestones for the next phase? What skill sets are required to achieve the milestones and who will carry out the required work? 4

6 Concept Initiation Tollgate Criteria of the Student: Title: MEEI/ MTEI Tollgate I Review Evaluation Guidelines Date: Assessed Area The Business Opportunity The Technology The Customer Market Competition Technology Development Plan Intellectual Property Presentation Skills Dealing with Questions Criteria - The Problem: Clearly articulated customer problem or market opportunity with quantification - Addressed a known customer pain - The solution that eliminates the customer pain is outlined and technically sound - The unique selling point is clearly identified - The value proposition is clearly articulated - Description of the technology underlying the solution is articulated - Architectural diagram of how the solution provided works - The core technology is identified - The target customers are identified clearly - Validation that the customer agree with the problem/pain point & that they would buy the solution - To what degree is the product or service a compelling purchase for the customer - Market research is conducted to collect VOC - How will the venture reach all the identified target customer segments - The total target market areas are appropriately identified and described - The customer groups/segments are identified - The attractiveness of the industry was demonstrated - The total market size (top down) for the service/product was adequately quantified - Competing technologies are identified and described - The potential response of competitors to a market entry is considered and the anticipated new venture actions identified - Sources of sustainable competitive advantage are identified and articulated - The high level product/service concept is articulated -The technical path to achieving the product/service is articulated - The current status of technology is reviewed with respect to the ability to achieve the product/service outcomes - A clear technology roadmap is articulated - Resources are identified and budgeted to create a prototype/proof of concept in 6-8 months - The plan for testing a prototype or minimum viable product with customers is articulated - Potentially competing intellectual property is identified and analyzed - "Freedom to operate" issues are identified and rationalized - An intellectual property protection plan is articulated - Structure - was it logical, did the audience know the structure, were points appropriately linked and/or summarized - Timing: did they deliver a presentation of the correct length - Pace: was information given at an appropriate rate - Visual/other aids: were they of a business standard and used appropriately - Clarity of speech: rate of speech, loudness - Personal presentation style - was the presentation delivered in a professional way? - Use of eye contact/movement - Audience engagement - Ability to respond appropriately - clear answers that effectively address the question Done (Yes/No) Comments Overall Comments MEMBERS: Signature Date Enterprise advisor Second faculty member Business Mentor Technical Mentor Dr. Tarek Sadek Chair Tollgate 1 Version

7 Appendix 2 Tollgate 2: Business Initiation Tollgate At the Business Initiation Tollgate, it is demonstrated that the proposed solution would serve identified customers and that the underlying technology for the solution can deliver the required essential characteristics of the solution for the customer. In Phase 2, the assumptions associated with the description of the opportunity in Phase 1 are tested by gathering the Voice of the Customer and translating this voice into testable solution characteristics. The results of this testing are used to validate that the solution would serve customers and that the technology can be used to deliver this solution. Candidates use the tools and concepts learned in Modules 2 and 3 and their information from potential customers and technology experts to: Review the concepts and assumptions from the Concept Initiation Tollgate, Use primary market research including voice of customer, to identify o The targeted customer groups, o The value proposition to the different customer groups, o The market size for the product and/or service using both, a topdown approach, and a bottom up approach to market sizing, o The price of the product and/or service, o The competitive situation with a detailed analysis of competitive technologies and of the organizations that provide competitive products/services. o An analysis of the expected response of the competition, and the planned action to address competition, Present a proof of concept o Show how the technology can deliver a solution that can meet the voice of the customer, o The results of testing the product and/or service POC with lead customer(s), o Is there any expected intellectual property? Any intellectual property issues that need to be resolved? o Identify the resources (skills, time, and cost) needed to carry out full development of the product, o Identify the project risks and risk management strategies, Develop bottom up financial projections which project income from revenue from sales and the projected cost of goods sold. Reconcile the required investment in development with the projected income stream. 6

8 Business Initiation Tollgate Criteria of the Student: Title: Assessed Area Market Development Proof-of-Concept Competition Financial Plan Presentation Skills Dealing with Questions MEEI/MTEI Tollgate 2 Review Evaluation Guidelines Criteria - Is the target market defined? Is the segment at which the product/service is to be targeted identified? - Have the intended target customers been contacted to acquire requirements? - Has a detailed market research study been conducted? - Has the market size been estimated using top-down and bottom-up methodology? - Has the product/service price been estimated and is there analysis to show fraction of customers willing to buy? - Has an approach to positioning from the customers/users perspective been articulated? - Has the definition of the product/service been clearly articulated? - Are the product's or service's features, requirements and specifications defined? -Is there evidence that the technology can be used to deliver the proposed product/service? - Has the customer/user reaction to the proposed new product/service been gauged for buy in? - Are the technical activities necessary to achieve the commercial product/service attributes identified? - Are the skills and resources (equipment, materials,..etc.) needed to achieve the commerical product/service identified? - Are the key risks and hurdles identified and addressed in a risk management plan? - Are competitive / alternative offerings clearly identified? - Has competitive benchmarking been conducted? - Is response of competitors anticipated? Is the response to competitors anticipated? - Are the strengths and weaknesses of the proposed offering identified? - Has a 5 year financial plan for the offering, backed by validated assumptions, been developed? - Have resource outlay and investment requirements been identified? - Has business sustainability been addressed satisfactorily? - Is the endeavor economically viable? - Structure: Was it logical? Did the audience know the structure? Were points appropriately linked and/or summarized? - Timing: Did they deliver a presentation of the correct length? - Pace: Was information given at an appropriate rate? - Visual/other aids: Were they of a business standard and used appropriately? - Clarity of speech: Rate of speech, loudness, - Personal presentation - was the presentation delivered in a professional way? - Use of eye contact/movement - Audience engagement - Ability to respond appropriately - clear answers that effectively address the question? Done (Yes/No) Date: Comments Overall Comments MEMBERS: Signature Date Enterprise advisor Second faculty member Business Mentor Technical Mentor Dr. Tarek Sadek Chair Tollgate 2 Version

9 Appendix 3 Tollgate 3: Business Startup Tollgate At the Business Startup Tollgate, the basis for developing a business based on opportunity is analyzed and a plan (business plan) for implementation is presented. The path to monetizing the business opportunity should lead to a workable plan to achieve the required investments and implementing the systems to serve customers. A Go to Market strategy that describes the approach and the channels that will be used to reach customers must be part of this plan. Candidates use the tools and concepts from Modules 4 and 5 to: Analyse the business case. Present different potential business strategies for start up and use a structured decision process to select the strategic approach to business startup. Based on the selected strategy, present the entire business plan and deal structure. Present a clear Go to market strategy that describes how awareness of the new product/service will be created in the market and the channels that will be used to get the product/service to customers. Identify specific lead users, partners and alliances. Describe how they will sell their first customer Revisit the competitive analysis Update the financial plan and develop monthly based cash flows for the first year. 8

10 Business Startup Tollgate Criteria of the Student: Title: MEEI/MTEI Tollgate 3 Review Evaluation Guidelines Assessed Area. - Has a situational (SWOT) analysis been carried out to frame the strategic issues? - Have alternative strategic choices to take the endeavour to market been identified? Business Strategy - Has the student applied a decision matrix analysis approach to analyze the preferred strategic approach to take the endeavour to market? - Have descriptions of the company vision, mission and objectives, business concepts, and value proposition been articulated? - Is the management team and their capabilities described? - Is the approach to protecting the source of sustainable competitive advantage articulated? Business Plan - Is there a product/service acquisition plan and resource plan? - Are competitive/alternative offerings clearly identified? - Is the financial plan and funding requirements developed (including proforma 5 year income statement, 12 month month-by-month cashflow, 5 year cashflow)? - Have organizational, legal and deal structures been worked out? - Acquiring the product - Has a sourcing plan for the product/service been developed? - Marketing & selling the product: Have sales and marketing plans, resources outlay, Go-To-Market Plan and financial projections been articulated? - Partners & Suppliers: Is there a proposed partnership and alliance strategy in place? - Lead Customers: Are lead customers for the product/service on board? - Structure: Was it logical, did the audience know the structure, were points appropriately linked and/or summarized - Timing: did they deliver a presentation of the correct length - Pace: was information given at an appropriate rate Presentation Skills - Visual/other aids: were they of a business standard and used appropriately - Clarity of speech: rate of speech, loudness, - Personal presentation - was the presentation delivered in a professional way? - Use of eye contact/movement - Audience engagement Dealing with Questions - Ability to respond appropriately - clear answers that effectively address the question Overall Comments Done (Yes/No) Date: Comments MEMBERS: Signature Date Enterprise advisor Second faculty member Business Mentor Technical Mentor Dr. Tarek Sadek Chair Tollgate 3 Version

11 Appendix 4 Academic Requirements and Logistics Associated with the Enterprise Project Tollgate Process Candidates are expected to pass through the three tollgates as part of the degree requirements. Tollgate performance is not graded pass/fail, but rather Go/No Go. Candidates that are cleared to graduate must sequentially achieve a Go decision at all three tollgates in the process. A No Go decision at a tollgate review indicates that the Advisory Committee believes that some of the required information is missing, or that the business case has not been appropriately analyzed according to the requirements of the gate in question. If the former case, the committee will ask candidates to resume work on the activities of the previous phase so that the required information can be assembled. In the latter case, the Advisory Committee will request a revised analysis of the business case and will provide candidates with direction with respect to the nature of the analysis to be carried out. Progress through the Enterprise Project will proceed according to best practices in risk management. This means that Tollgates will be carried out sequentially and that the advice of Advisory Committee members will be valued in directing the work between Tollgate reviews. In general, Tollgate reviews for more than one tollgate at a time will not be permitted. Candidates are responsible for planning their progress through the Enterprise Project process and for ensuring that their progress is consistent with their scheduling objectives. Rare exceptions to this rule might be permitted when: Special circumstances exist that were beyond the control of the candidate. There is a consensus among the Advisory Committee members that a multiple Tollgate review is appropriate. The Candidates interaction with the Advisory Committee members has been consistent and ongoing over the course of the Enterprise Project. Tollgate Evaluation Policy 1- Each project team shall have a Tollgate Advisory Committee (TAC), constituted of: a. A Faculty Advisor 1 b. A Business Development Manager (BDM) 2 c. A Technical Mentor 3 1 A Faculty Advisor must be a full-time faculty at McMaster, teaching one of the core modules of the MEEI/MTEI programs 2 Must be a full-time or part-time staff member of the XCEEi Centre having an in-depth and up to date understanding of the tollgate requirements 10

12 d. A Business Mentor 4 e. A second Faculty Member from XCEEi 5 All members of the committee must be present for the meeting for quorum. 2- The BDM shall act as the Process Chair of the tollgate: a. Guiding students through the enterprise development tollgate process, review and provide feedback b. Ensuring the smooth flow of the meeting, including the presentation, the Q&A, the closed-door discussion and the final decision and communication to the students within the allotted time. c. Communicating the decision of the TAC to the students 3- The teams must have the tollgate meeting scheduled and the meeting notices circulated at least two weeks prior to the tollgate date. 4- Teams will submit their slide deck to the Administrative Assistant for distribution to the TAC at least 2 days prior to each tollgate meeting. For tollgate 3, the team must also submit their business plan at least 1 week prior to the meeting. The Administrative Assistant will distribute the business plan to the TAC. 5- After the Tollgate presentation, the members of the TAC will ask questions of the team as they deem fit and appropriate 6- After all the questions have been asked or the maximum time for Q&A has been exhausted, whichever comes first, the student team will be excused and a closeddoor discussion between the members of the TAC will ensue. The maximum time limits will be 45 minutes for presentations, 45 minutes for Q&A, 30 minutes for committee deliberation including final decision. 7- All the members of the TAC will be afforded enough time to express their opinions on both the particular and general aspects of the presentation and the progress of the students 8- The final evaluation for Go/no-Go decision will be done by the two faculty members only, taking into account the input of the rest of the members of the TAC. 9- The evaluation can range from: No-Go, to Conditional Go to Go. 10- The decision by the two faculty members must be unanimous. In case of disagreement, it is the more unfavorable decision that primes. For example, if Faculty No. 1 votes for a Go and the Faculty No. 2 votes for a no-go or a conditional Go, then it s Faculty No. 2 vote that primes. 3 Should be a demonstrably technical expert in the subject matter of the project of the advised team 4 Should be a demonstrably business expert in the subject matter of the project of the advised team 5 Must be another full-time faculty at McMaster, teaching one of the core modules of the MEEI/MTEI programs 11

13 11- Every Decision Notice will require both names and signatures of both Faculty members. 12- The signatures on the Tollgate Criteria will serve for attendance and comments purposes only and will not be required for the purpose of the Decision. 13- The decision of the committee will be communicated to the team/student by the BDM. The academic advisor will have the tollgate checklist and can provide details of the results to the team if they are requested. 14- There must be a minimum time of at least one (1) month between each tollgate meeting. 15- Tollgate meeting blackout dates will be observed August and December No tollgates will be scheduled during the blackout dates. 16- Special Situations: a. In case of the absence of the BDM during a tollgate, then a suitable alternate Chair will be found. This position will be non-voting and will not be a current member of the TAC. They will act in the role of the BDM in running the meeting. b. In case of the absence of one of the mentors, the meeting must be attended by their representative or delegate. c. In case of the absence of the second Faculty member, then the Go/no-Go decision will be made by the attending Faculty member and the BDM. This solution is only in effect until a third Faculty member is in place within the Entrepreneurship program. MEEI/MTEI Enterprise Project Tollgate Procedures For the MEEI and MTEI students to complete their enterprise project they must pass three tollgates to fulfill the requirement of his/her Master s degree. Administrative Process to be taken at each tollgate: 1. Candidate(s) decide to proceed with tollgate with the support of the Business Development Manager. 2. Candidate(s) will arrange a date that is convenient with: a. Enterprise Advisor b. Technical Mentor c. Business mentor d. Business Development Manager e. A second Faculty Member from XCEEI The Graduate Administrative Assistant will have Tollgate Reserved Dates for Faculty Members and the Business Development Manager. The Graduate Administrative 12

14 Assistant should be copied on all s related to the scheduling of a Tollgate. 3. Candidate(s) will ensure that the Non-disclosure agreements for both the technical mentor and business mentor are on file in the School administrative office. 4. Candidate will reserve a conference room through Graduate Administrative Assistant. 5. Graduate Administrative Assistant will prepare the formal Notice of Meeting and to all participants. 6. Graduate Administrative Assistant, in advance of the meeting, will prepare: a) Formal tollgate review forms b) Decision form. Complete tollgate package for each member of the Advisory Board includes: i) The notice of meeting form ii) Tollgate form iii) Decision form 7. Business Development Manager communicates the result of the tollgate to the Graduate Administrative Assistant, along with documentation for any follow-up work if a Conditional Go is determined by the committee. The Graduate Adminstrative Assistant will prepare the result letter to be signed by the Enterprise Advisor. The Graduate Administrative Assistant will ensure delivery of the result letter to the candidate(s). FOR SEP ADMINISTRATIVE OFFICE USE: Documentation that should be in formal student file in SEP Administrative office: 1. from Business Development Manager supporting the student to seek Tollgate review. 2. Official notice of tollgate to student and advisory board members 3. Executed tollgate review criteria form with signatures of advisory board 4. Decision form signed by both faculty members 5. Copy of Result of Tollgate letter provided to the student. Paper copy and e-copy of student s tollgate presentation and report applicable to the tollgate. 13